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The High Court disposed of the writ petition with specific directions. The Court directed the petitioner to update his bank account details on the Income Tax department's portal. If the petitioner encountered further difficulties in obtaining the refund after updating the details, he was advised to approach the 3rd respondent (Income Tax Officer). The 3rd respondent was then directed to take necessary steps to ensure that the refund ordered in Ext.P3 was actually paid to the petitioner. This action was to be completed within a period of two months from the date of the petitioner filing his request with the 3rd respondent. The Court did not delve into the merits of the refund itself but focused on facilitating its disbursement.
The High Court did not decide on the merits of the case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P4) before the 2nd respondent (Commissioner of Income Tax (Appeals)) which was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the appeal in a time-bound manner. The Court directed the 2nd respondent to consider and pass appropriate orders on Ext.P4 expeditiously. Additionally, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) and demand notice (Ext.P3) until the disposal of the appeal. No issue was expressly left undecided, as the Court's action was procedural.
The High Court held that Section 147 of the Income Tax Act, 1961, requires the Assessing Officer to have 'reason to believe' that income chargeable to tax has escaped assessment as a sine qua non for initiating reassessment. While information from internal audit parties can constitute a reason, the Assessing Officer must believe this information as a reason to proceed. The Court noted that the CIT(A) had categorically found that the initiation of reassessment was based on audit objections, but the Assessing Officer did not accept the audit party's opinion on all reasons and initiated proceedings as an abundant caution. This finding by the CIT(A) was not dispelled by the Revenue before the Tribunal. The Tribunal, in turn, found that none of the reasons were pure factual errors and that an audit opinion on the application or interpretation of law cannot be a reason for reopening. The Tribunal also relied on the Gujarat High Court's decision in Vijay Rameshbhai Gupta vs ACIT, holding that reassessment vitiated if the AO acted under compulsion of the audit party and not independently. The High Court agreed with the CIT(A) and the Tribunal that the Assessing Officer had not independently formed the 'reason to believe' as required by Section 147. Therefore, the initiation of reassessment was illegal. Substantial question no.2 was answered in favour of the assessee. The other questions were rendered academic as the case failed at the threshold. The appeal was dismissed.
The High Court of Kerala did not decide the merits of the appeal. Instead, it acknowledged that the petitioner had already filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (1st respondent) and that this appeal was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the 1st respondent to consider and pass appropriate orders on Ext.P3 expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. Additionally, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The specific findings on the Section 80P deduction claim or the applicability of the Mavilayi judgment were not made by the High Court in this order.
The High Court disposed of the writ petition by directing that any recovery steps for amounts due under the assessment order (Ext.P1), as confirmed by the first appellate authority (Ext.P2), shall be kept in abeyance. This stay is effective until the ITAT passes orders on the petitioner's stay application (Ext.P4). The Tribunal is directed to endeavor to pass orders on the stay application within three months from the date of receiving a certified copy of this judgment. The Court did not decide on the merits of the appeal or the stay application itself, but rather on the procedural aspect of keeping recovery in abeyance pending the Tribunal's decision. The principle is that recovery can be deferred pending adjudication of a stay application before the appellate tribunal.
The High Court of Kerala did not decide the merits of the case. Instead, it deemed it appropriate to dispose of the writ petition by directing the Appellate Authority (the 2nd respondent, Commissioner of Income Tax (Appeals)) to consider the appeal (Ext.P4) filed by the petitioner in a time-bound manner. The court directed the 2nd respondent to consider and pass appropriate orders on Ext.P4 as expeditiously as possible. Furthermore, the court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) until the disposal of the appeal. The issue of whether the petitioner is entitled to the deduction under Section 80P was expressly left undecided by the High Court, as the matter was remanded for consideration by the appellate authority.
The High Court of Kerala did not decide the merits of the case. Instead, it acknowledged that the petitioner had already preferred an appeal (Ext.P4) before the 2nd respondent (Commissioner of Income Tax (Appeals)) and that this appeal was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the pending appeal in a time-bound manner. The Court directed the 2nd respondent to consider and pass appropriate orders on Ext.P4 expeditiously. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) and demand notice (Ext.P3) until the disposal of the appeal. No specific finding was made on the issues raised, as the appeal was to be decided by the appellate authority.
The High Court disposed of the writ petition with a direction. If the petitioner files a stay petition before the National Faceless Appeal Centre (NFAC) within two weeks from the date of the order, any steps for recovery of amounts due under the assessment order shall remain suspended until a decision is taken on the stay petition by the NFAC. The court further directed that if the petitioner faces difficulties in uploading the stay petition to the NFAC, they may file it before the jurisdictional assessing authority, who shall ensure it is forwarded to the NFAC for consideration. The NFAC is to decide the stay petition after providing the petitioner an opportunity of hearing. The court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of stay pending appeal.
The High Court of Kerala did not decide the merits of the assessment orders or the applicability of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. Instead, the Court deemed it appropriate to direct the Appellate Authority (the 3rd respondent, National Faceless Appeal Centre) to consider the pending appeals (Exts.P3 and P4) in a time-bound manner. The Court ordered the 3rd respondent to consider and pass appropriate orders on the appeals expeditiously. Furthermore, the Court granted interim relief by directing that no coercive steps shall be initiated against the petitioner pursuant to the assessment orders (Exts.P1 and P2) until the disposal of the appeals. The core principle here is that when statutory appeals are pending, the High Court, in its writ jurisdiction, will generally direct expeditious disposal rather than adjudicating the underlying tax dispute, especially when interim protection is warranted.
The High Court disposed of the writ petition by directing the National Faceless Appeal Centre to consider the stay applications (Exts.P13 to P17) along with any applications for condonation of delay. The Court mandated that orders be passed thereon after providing an opportunity of hearing to the petitioner. Crucially, the Court ordered that recovery proceedings for amounts due under the assessment orders (Exts.P3 to P7) shall be kept in abeyance until orders are passed on the stay petitions. It was clarified that the appellate authority would only consider the stay petitions on merits if it decides to condone the delay in filing the appeals. No specific finding on the merits of the assessment orders or the delay itself was made by the High Court.
The tribunal held that an employer's circular cannot override the statutory right of an employee to claim reimbursement for actual medical expenses incurred for work-related injuries. It also found the employee's declared monthly income to be higher than what the Commissioner had assessed.
The High Court did not decide the merits of the case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P2) against the assessment order (Ext.P1) before the Commissioner of Income Tax (Appeals), and this appeal was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the appeal in a time-bound manner. The Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on Ext.P2 expeditiously. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order until the disposal of the appeal. No specific finding was made on the issue of Section 80P deduction or the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment.
The High Court disposed of the writ petition with a direction to the Commissioner of Income Tax (Appeals) to consider and pass orders on the stay petitions filed by the petitioner. This consideration must be done after affording the petitioner an opportunity of being heard, and the order should be passed within a period of 3 months from the date of receipt of a certified copy of the judgment. Crucially, the Court directed that until such time as orders are passed on the stay petitions, any steps for recovery of amounts due under the assessment orders shall be kept in abeyance. The Court did not decide on the merits of the assessment orders or the stay applications themselves, only on the procedural aspect of their consideration and the interim relief concerning recovery.
The Tribunal was justified in dismissing the appeal as the assessee failed to provide evidence that the capital work-in-progress was related to renovation and not a capital expenditure. The onus was on the assessee to substantiate the claim as revenue expenditure.
The High Court did not decide the merits of the assessment order or the appeal. Instead, it directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) and the application for condonation of delay (Ext.P4) expeditiously, within a period of 2 months from the date of receipt of the judgment. The Court clarified that the appellate authority needs to consider the appeal on merits only if the delay in filing the appeal is condoned. Until the disposal of the appeal, no coercive steps are to be initiated against the petitioner pursuant to the assessment order (Ext.P1).
The High Court disposed of the writ petition by directing the Income Tax Appellate Tribunal (2nd respondent) to consider and pass orders on the stay petitions (Exts.P8 to P10) filed in the appeals (Exts.P5 to P7) within a period of two months from the date of receipt of a certified copy of the judgment. The Court further directed that until orders are passed on the stay petitions, any steps to recover amounts due under the assessment orders (Exts.P1, P2, and P3) shall be kept in abeyance. The High Court did not decide the merits of the appeals or the stay petitions themselves, but rather directed the Tribunal to proceed with their consideration.
The High Court disposed of the writ petition by directing that any steps to recover amounts due under the assessment order shall be kept in abeyance until orders are passed on the petitioner's stay petition by the 2nd respondent (NFAC). The Court further directed the 2nd respondent to endeavor to pass orders on the stay petition within two months from the date of receipt of a certified copy of the judgment. The principle is that recovery can be deferred pending the disposal of a stay application before the appellate authority, provided the appellate authority is directed to decide the stay application expeditiously.
The High Court addressed questions 1 to 3 first. It held that the CBDT Circulars are not applicable vis-à-vis the power under Section 263. The Commissioner has supervisory jurisdiction over the legality of assessment proceedings, including omissions. The Commissioner's reasoning for setting aside the assessment, based on the AO not examining the issue, was sufficient to invoke Section 263, and a contrary view would restrict the Commissioner's discretion under Section 263 concerning limited scrutiny. Therefore, questions 1 to 3 were answered in favour of the Revenue and against the assessee. Regarding questions 4 and 5, the High Court found merit in the assessee's argument that the Tribunal might have supplemented or expanded the Commissioner's reasoning. The Tribunal's finding that the AO was duty-bound to make a prima facie inquiry and seek permission to convert limited scrutiny to complete scrutiny was deemed to warrant interference. Consequently, the findings of the Tribunal on these aspects were set aside, and the matter was remitted to the Tribunal for reconsideration. For statistical purposes, these questions were answered in favour of the assessee and against the Revenue. The appeal was allowed in part, remitted to the Tribunal for considering questions 4 and 5.
The High Court of Kerala, considering the facts and the limited nature of the relief sought, disposed of the Writ Petition. It directed the National Faceless Appeal Centre to consider and pass orders on the petitioner's application for stay (Ext.P3) filed in his appeal (Ext.P2) as expeditiously as possible, after providing the petitioner an opportunity of being heard. Crucially, the Court ordered that until such time as orders are passed on the stay petition, any proceedings for recovery of amounts due under the assessment order (Ext.P1) shall be kept in abeyance. The Court did not decide on the merits of the assessment order or the stay petition itself, but rather on the procedural aspect of ensuring the stay petition is heard before recovery is pursued.
The High Court held that the phrase 'a taluk' in the explanation to Section 80P(4) should be interpreted literally and does not include 'more than one taluk'. Therefore, co-operative banks operating in more than one taluk are not eligible for the deduction.
The High Court disposed of the writ petition by directing that if the petitioner files a stay petition either through the e-filing portal of the National Faceless Appeal Centre or before the jurisdictional Assessing Officer, any proceedings for recovery of amounts under the assessment order (Ext.P1) shall be kept in abeyance until a decision is taken on the stay petition. This benefit is contingent upon the stay petition being filed within ten days from the date of the order. The Court did not decide on the merits of the appeal or the stay petition itself, but provided a procedural direction to facilitate the consideration of the stay application.
The High Court disposed of the writ petition by directing the 3rd respondent, the Assistant Commissioner of Income Tax, to consider and pass orders on Ext.P6 (the petitioners' representation) expeditiously, and at any rate, within a period of two months from the date of receipt of a certified copy of the judgment. The petitioners were to be afforded an opportunity of hearing before orders are passed on Ext.P6. The court did not decide on the merits of the attachment itself or the validity of the petitioners' claim regarding the expiry of the attachment period, but rather on the procedural aspect of ensuring the representation is considered.
The High Court held that the phrase 'a taluk' in the explanation to Section 80P(4) should be interpreted literally and does not include 'more than one taluk'. Therefore, co-operative banks operating in more than one taluk are not eligible for the deduction.
The High Court held that the interpretation of 'a taluk' in the definition of 'primary co-operative agricultural and rural development bank' under Section 80P(4)(b) should be strictly literal. The Court applied the golden rule of interpretation, emphasizing the plain grammatical meaning of words. It found that expanding 'a taluk' to mean 'more than one taluk' would not satisfy the subject and context of the provision, particularly the phrase 'area of operation confined'. The Court reasoned that such an expansion would render the confinement aspect meaningless and lead to an absurd situation. Therefore, the Court concluded that the benefit of Section 80P is limited to banks whose area of operation is confined to a single taluk. The questions were answered in favour of the Revenue and against the Assessee. The appeals were dismissed.
The High Court held that the phrase 'a taluk' in the explanation to Section 80P(4) should be interpreted literally and does not include 'more than one taluk'. Therefore, the assessee, operating in more than one taluk, was not eligible for the deduction.
The High Court disposed of the writ petition by directing the second respondent (National Faceless Appeal Centre) to consider and pass orders on the stay application (Ext.P3) filed in the appeal (Ext.P2). This consideration must be done after affording the petitioner an opportunity of being heard, and the order is to be passed within a period of two months from the date of receipt of a certified copy of the judgment. Furthermore, the Court ordered that any steps for the recovery of amounts due under the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on the stay petition. The principle established is that High Courts can intervene to ensure timely consideration of stay applications by appellate authorities, and can grant interim relief by staying recovery proceedings pending the decision on such applications.
The High Court allowed the writ petition and quashed the assessment order (Ext.P3). The Court reasoned that while the transfer of proceedings to the National Faceless Assessment Centre was legally permissible, the Centre was aware that the firm had been dissolved and its business discontinued, based on earlier replies filed by the petitioner before the Jurisdictional Assessing Officer. Despite this knowledge, the National Faceless Assessment Centre issued pre-assessment notices to the email address of the dissolved firm. The Court found this to be a violation of principles of natural justice, as the petitioner could not respond to these notices. Citing the Supreme Court's decision in Calcutta Discount Co. Ltd. v. Income Tax Officer, the Court held that the petitioner was entitled to relief under Article 226 of the Constitution, notwithstanding the pendency of an appeal. The matter was remanded to the National Faceless Assessment Centre for fresh assessment. The petitioner was directed to update their email address on the Income Tax Department's portal within two weeks and also intimate the Jurisdictional Income Tax Officer of the correct email address for receiving notices.
The High Court observed that the questions of law were substantial and that conclusions were recorded by the Tribunal based on an erroneous appreciation of the assessee's reply. The Court found that the Tribunal had committed a mistake in its appreciation of the facts. Consequently, the common order of the Tribunal dated 19.05.2020 was set aside. The appeals were remitted back to the Tribunal for consideration and disposal in accordance with the law. Parties were granted liberty to bring on record any material they deem fit. The Court explicitly stated that it had not examined the applicability or extent of Section 145A, leaving all contentions open for the Tribunal to consider. The issue regarding depreciation on undivided share right in land was not addressed in the High Court's decision as the appeals were remitted.
The High Court found that the Tribunal's conclusion was based on an erroneous appreciation of the assessee's reply. The Court set aside the Tribunal's order and remitted the matter back for fresh consideration.
The High Court disposed of the writ petition by directing the Commissioner of Income Tax (Appeals) to consider and pass orders on the petitioner's stay application expeditiously, and at any rate, within three months from the date of receipt of a certified copy of the judgment. The Court further directed that any demand pursuant to the assessment order shall be kept in abeyance until orders are passed on the stay application. The High Court found that the limited nature of the relief sought by the petitioner warranted this intervention. The principle established is that a High Court, in its writ jurisdiction, can direct an appellate authority to dispose of a stay application expeditiously and can grant interim relief by keeping demand in abeyance pending such disposal, especially when recovery is apprehended.
The High Court directed the 1st respondent (Income Tax Officer) to consider the petitioner's application for stay filed under Section 220(6) of the Income Tax Act within two months from the date of receipt of a certified copy of the judgment. Pending the decision on the stay application, all proceedings for recovery of amounts due under the order of assessment (Ext.P1) were to remain suspended. The Court did not decide on the merits of the stay application itself, only on the procedural direction to consider it.
The High Court disposed of the writ petition by directing the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the petitioner's stay application (Ext.P3) expeditiously, and at any rate, within three months from the date of receipt of a certified copy of the judgment. Furthermore, the Court ordered that any demand pursuant to the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on the stay application. The Court acknowledged the limited nature of the relief sought by the petitioner.
The High Court held that the authorities below erred by relying solely on a previous year's order without independent consideration for the current assessment year. Each year's assessment must be decided on its own merits.
The High Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to expeditiously dispose of the stay application (Exhibit P3) within a period of three months from the date of the order. The Court further ordered that recovery proceedings shall remain stayed until the disposal of the stay petition. The Writ Petition (Civil) was disposed of accordingly. The judgment does not explicitly address the prayer for expeditious disposal of the appeal itself, focusing primarily on the stay application. No issues were left undecided, as the court granted the primary relief sought regarding the stay.
The High Court allowed the writ petition, directing the Income Tax Officer not to proceed with the recovery of the demand for assessment year 2017-2018 until the stay application (Ext.P4) is disposed of by the third respondent (Income Tax Appellate Tribunal). The Court found that the reliefs prayed for by the petitioner could be granted, considering the nature of the challenges raised. The operative direction is to stay recovery proceedings pending the disposal of the stay application by the ITAT. No specific issue was left undecided, as the Court granted the immediate relief sought.
The High Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to expeditiously dispose of the stay application (Exhibit P3) within a period of three months from the date of the order. The Court also ordered that recovery proceedings shall remain stayed until the disposal of the stay petition. The Writ Petition (Civil) was disposed of accordingly. The issue of expeditious disposal of the appeal petition (Exhibit P2) was not explicitly addressed in the final operative directions, though it was part of the petitioner's prayer.
The High Court of Kerala, considering the circumstances presented, directed the Appellate Authority (Commissioner of Income Tax (Appeals)) to consider and dispose of the pending appeals expeditiously. Specifically, the Court ordered the disposal of Ext.P4 appeal in W.P.(C)No.39741/2022 and Ext.P5 appeal in W.P.(C)No.39646/2022 within a period of four months from the date of the order. The judgment does not delve into the merits of the TDS computation or the inclusion of DCRG, commutation of pension, and terminal surrender of earned leave, as the petitions were disposed of on procedural grounds. The core principle established is the court's power to direct expeditious disposal of long-pending statutory appeals.
The High Court of Kerala, considering the circumstances presented, directed the Appellate Authority (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeals expeditiously. Specifically, the Court ordered the disposal of Ext.P4 appeal in W.P.(C)No.39741/2022 and Ext.P5 appeal in W.P.(C)No.39646/2022 within a period of four months from the date of the order. The Court did not delve into the merits of the TDS computation dispute itself, focusing solely on the procedural aspect of ensuring timely resolution of the pending appeals. No issue was left undecided as the court's direction was procedural.
The High Court of Kerala disposed of the writ petition by directing the second respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the petitioner's stay application (Ext.P3) in accordance with law, as expeditiously as possible, and at any rate, within a period of three months from the date of receipt of a certified copy of the judgment. Furthermore, the Court ordered that until orders are passed on the stay application, any proceedings for recovery of amounts due under the assessment order (Ext.P1) shall be kept in abeyance. The Court found that the limited nature of the relief sought by the petitioner warranted this direction.
The High Court disposed of the Writ Petition by directing the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay petitions (Exts.P4 and P4(a)) within three months from the date of receiving a certified copy of the judgment, after providing the petitioner an opportunity to be heard. Crucially, the Court ordered that any demands pursuant to the assessment orders (Exts.P1 and P1(a)) shall be kept in abeyance until orders are passed on the stay petitions. The principle established is that recovery proceedings can be deferred pending the disposal of stay applications before the appellate authority, provided a reasonable timeframe is set for the authority's decision.
The High Court held that the penalty proceedings were not time-barred. It reasoned that the proviso to Section 67(1) of the KVAT Act speaks of the natural flow of events, and when an assessee interdicts the proceedings by obtaining a stay, that period should be excluded from the limitation calculation. The Court agreed with the Tribunal's finding that the dealer could not benefit from the stay obtained, and thus, the initiation and completion of penalty proceedings were within time. However, the Court found that the Tribunal had not adequately considered the merits of the penalty imposed, particularly the quantum, merely referring to a reduction in penalty by the revisional authority. Therefore, the Court set aside the Tribunal's findings on the merits of the penalty and remitted the matter back to the Tribunal for a fresh consideration and disposal of the grounds raised on the quantum and other merits of the penalty. The Court confirmed the Tribunal's finding on the limitation period.
The High Court of Kerala did not decide on the merits of the assessment order or the petitioner's claim for deduction under Section 80P. Instead, the Court deemed it appropriate to direct the Appellate Authority (the 1st respondent, NFAC) to consider the appeal filed by the petitioner (Ext.P3) in a time-bound manner. The Court ordered the 1st respondent to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court directed that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) and the demand notice (Ext.P4) until the disposal of the appeal. The issue of whether the petitioner satisfied the ingredients of a Primary Agricultural Credit Society and the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment were left to be decided by the appellate authority.
The High Court allowed the writ petition. The Court noted the respondent's admission in the counter affidavit that the petitioner had requested a personal hearing via video conferencing and that the records did not indicate such an opportunity was granted. The Court also acknowledged the respondent's concession that providing a personal hearing is mandatory from April 1, 2022, if requested by the assessee, as per Section 144B(6)(viii) of the Income Tax Act. Consequently, the Court found it clear that the petitioner was not offered any opportunity of personal hearing despite a specific request. The assessment order (Ext.P6) was set aside, and the respondent was directed to complete the assessment afresh in accordance with law after affording the petitioner an opportunity of being heard. The ratio decidendi is that failure to provide a mandatory personal hearing, as stipulated by Section 144B(6)(viii), vitiates the assessment order.
The High Court held that the penalty proceedings were not time-barred. It reasoned that the proviso to Section 67(1) of the KVAT Act speaks of the natural flow of events, and when an assessee interdicts the proceedings by obtaining a stay, that period should be excluded from the limitation calculation. The Court agreed with the Tribunal's finding that the dealer could not benefit from the stay obtained, and thus, the initiation and completion of penalty proceedings were within time. However, the Court found that the Tribunal had not adequately considered the merits of the penalty imposed, particularly the quantum, merely referring to a reduction in penalty by the revisional authority. Therefore, the Court set aside the Tribunal's findings on the merits of the penalty and remitted the matter back to the Tribunal for a fresh consideration and disposal of the grounds raised on the quantum and other merits of the penalty. The Court confirmed the Tribunal's finding on the limitation period.
The High Court disposed of the writ petition by directing the second respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the petitioner's application for stay (Ext.P3) in accordance with law, as expeditiously as possible, and at any rate, within a period of three months from the date of receipt of a certified copy of the judgment. The Court further directed that until orders are passed on the stay petition, any proceedings for recovery of amounts due under the assessment order (Ext.P1) shall be kept in abeyance. The Court found the limited nature of the relief sought by the petitioner to be acceptable given the facts and circumstances. No specific issue was left undecided, as the Court granted the procedural relief sought.
The High Court disposed of the writ petition with a direction to the first respondent (Director General of Income Tax) to consider and pass orders on Ext.P5, the petitioner's representation. This was to be done after affording the petitioner an opportunity of being heard. The Court explicitly clarified that it had not expressed any opinion on the merits of the matter. The first respondent was directed to endeavor to dispose of Ext.P5 within two months from the date of receipt of a certified copy of the judgment. The court did not decide the substantive issue of whether the cash should be returned or if the adjustment by the department was lawful, leaving it open for the first respondent to decide in accordance with law.
The High Court, noting the consensus between the parties and referencing the Supreme Court's judgment in Asst. Commissioner of Income Tax (Exemptions) v Ahmedabad Urban Development Authority, decided to remit the matters back to the Assessing Officer for a fresh decision. The questions raised in the appeals were answered in favour of the assessee for statistical purposes.
The High Court held that there was no violation of the principles of natural justice. The Ext.P7 order was preceded by a show cause notice, the petitioner had an opportunity to reply, and was heard before the order was passed. The Court found that the contention that the petitioner's reply was not properly considered did not amount to a violation of natural justice. The judgments relied upon by the petitioner were distinguished as being rendered in completely different fact circumstances. Specifically, the Rithala Education Society case involved an order issued without considering the reply, and the Divya Capital One Private Limited case involved insufficient time to file a reply, neither of which applied here. The Court noted that Ext.P7 considered the petitioner's submissions and found that the nature of transactions explained in the reply required detailed examination with evidence during the reassessment proceedings. Therefore, the Court found no grounds to interfere with Ext.P7 under Article 226 of the Constitution and dismissed the writ petition.
The High Court disposed of the writ petition by directing the 2nd respondent, the National Faceless Appeal Centre, to consider and pass orders on the petitioner's application for condonation of delay (Ext.P3). If the delay is condoned, the 2nd respondent is further directed to pass orders on the stay application (Ext.P4) after providing an opportunity of hearing to the petitioner. The 2nd respondent is to endeavor to pass these orders within two months of receiving a certified copy of the judgment. Crucially, until orders are passed on Exts.P3 and P4, any recovery proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance. The Court clarified that if the delay is not condoned, there will be no requirement to pass a separate order on the stay application, and recovery proceedings can proceed. It was also clarified that the Appellate Authority would only need to pass orders on the merits of the appeal if the delay is condoned.
The High Court, appreciating the consensus between the learned Senior Counsel for the assessee and the revenue, decided to remit the matters back to the Assessing Officer for a fresh decision on all aspects in accordance with law. The Court noted that both parties agreed to this course of action. The Court acknowledged that the assessee's argument, supported by the judgment in Asst. Commissioner of Income Tax (Exemptions) v Ahmedabad Urban Development Authority, suggested that the principal issues needed to be re-examined by the Assessing Officer. The revenue's contention that registration alone is not conclusive was also noted. Consequently, the questions raised in the appeals were answered in favour of the assessee for statistical purposes, and the matter was remitted for a fresh assessment. No specific issue was left undecided, as the entire matter was sent back for de novo consideration.